NIO Shares Fall After EV Company Cuts Q4 Delivery Guidance

Electric vehicle maker NIO's (NYSE: NIO) share price has declined more than 5% premarket Tuesday after the company cut its fiscal fourth quarter delivery target.

The Shanghai, China-based firm said in a press release that it has been “facing challenges” in delivery and production as a result of supply chain constraints caused by the Omicron Covid outbreak in major cities in China.

“While our teams have strived to maintain continuous operations on all fronts, we were not able to reach our full capacities, particularly when there have been disruptions on delivery and registration procedures involving users,” the company said.

NIO now sees fiscal fourth-quarter deliveries between 38,500 to 39,500, down from the previous forecast of 43,000 to 48,000 vehicles.

On December 24, the company hosted its NIO Day event, launching its EC7, a smart electric flagship coupe SUV set to be delivered in May 2023, and ES8, an all-around smart electric flagship SUV scheduled to be delivered in June 2023.

Following the event, BofA analyst Ming Hsun Lee said the firm sees “strong model pipelines” for NIO.

The analyst told investors in a research note that the flagship coupe SUV model has “elegance” while the ES8 will enhance performance based on the NT2.0 platform. Lee maintained a Buy rating and $15 per share price target on NIO, stating that it has “advantages in the premium smart EV segment and strong model pipelines.”

According to TipRanks, eight out of 12 analysts have a Buy rating on NIO shares, with four assigning the stock a Hold rating. The average price target is $16.31, representing a potential 48% upside from last week's close.